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Q&A with Mark Skinner, Vice President, State Science & Technology Institute

Women in Hawaii

Mark Skinner is Vice President of SSTI and director of the Regional Innovation Acceleration Network Project. He has participated in technology-based economic development for 27 years, working for Ohio's Thomas Edison Program, establishing Ohio's SBIR assistance program and consulting on several Battelle directed projects prior to joining SSTI in 1998.

Q: What is RIAN and how does the website promote the initiatives?

A: The Regional Innovation Network (RIAN) is in part an economic development community response to the President's call in his State of the Union address for the nation to "out innovate" the rest of the world. Within weeks of taking their positions with EDA, Assistant Secretary Fernandez and Deputy Assistant Secretary Brian McGowan posed a similar challenge to SSTI and some its members: how do we make our economic development strategies more innovative at the same time we're helping high growth startup companies create jobs and wealth? RIAN evolved out of months of talks with EDA, SSTI staff and tech-based economic development practitioners.

We know every public dollar invested in science, technology, innovation and economic development needs to have the greatest impact possible because the demands on public funding are many. So the RIAN project represents the beginning of several different activities around the central theme of helping make all economic development more effective and capital efficient. And it's really exciting to see how eager so many organizations within the entire economic development community are to try something new or look at regional growth strategies in a slightly different way.

The RIAN website has three main elements to help transform economic development. Not too surprisingly, the elements correspond closely to the acronym:

  1. Regional
  2. Innovation Acceleration
  3. Network

Regionalism. The RIAN website outlines a “clean slate” perspective on understanding regional innovation system theory – which is a high brow way of saying understanding how economic growth in a global era is based almost entirely on creating and adopting innovation. We think knowing how your regional economy really works – and I can almost guarantee it doesn’t follow closely with most of the political lines we’ve drawn on the maps – is an important starting point.

The RIAN website begins with the premise that we’re all in this together, the entire economic development community. You’ll see that within the graphic image and links provided on the “About RIAN page.” Our community has a lot to gain by convening and sharing thoughts on how to out innovate the world. RIAN is built around the idea that we have to do that on a region-by-region basis to a large degree. On the Guiding Principles page in the “About” section, you’ll see the 12-step thinking that led to RIAN’s existence.

EDA has made a lot of important investments in providing tools for regional assessment, like Know Your Region and the upcoming Cluster Mapping project. The RIAN website brings those along, adds a little and provides a regional innovation system perspective to all of it. That’s explored under “Regional Assets” of the VDO Basics section of the site.

Innovation Acceleration. The next element of RIAN is exploring the concept of Venture Development Organizations as a successful, new tool in the regional innovation support portfolio. This stems from what SSTI has observed over the past 15 years – the emergence of a new group of public-private economic development entities that don’t neatly fit any of the usual weapons in the arsenal of innovation/economic development support mechanisms (incubators, technology parks, research centers, SBDCs, EDDs, CDCs, state grant programs, etc).

RIAN is about working with the innovation support community to develop a working definition for VDOs, to understand how VDOs differ from other strategies, to show that VDOs are successful, and to introduce the VDO concept to more regions of the country to consider designing their own.

The key to this is to show genuine economic impacts and the RIAN website is full of this stuff: hard data on job creation numbers, wages paid by client companies, private investment attracted, and revenues earned. This stuff really works. And it is working in lots of very different places in the country. Mostly, RIAN holds, because the approaches are tailored to the specific assets of the region – including the human talent and the financial resources available.

And the final element of RIAN really focuses on the N work in the acronym: Network. To out innovate we need to work together. Companies succeed only when they work with others and communicate with others (particularly their customers). Same goes for economic development. We have to break down barriers to the economic development community talking with each other, regardless of which bubble in the “About RIAN” image on our website groups historically fit. So the RIAN website and activities will be about sharing and celebrating success of client companies, best practices, and lessons learned. These pieces will be developed as the website community grows, but we’ll start with some webinars and open conference calls to let people talk about some of the key issues to regional innovation support in these challenging times.

Q: Discuss the importance of Venture Development Organizations and cite examples of how these entities are driving economic and job growth.

A: VDOs, in my opinion, represent one of the, if not the, most promising approaches for the future success of economic development. I could get really bogged down on why: like the increasing pressures and trends on public finances and expenditures; the increasing number of entire industries that are looking to outsource product innovation and development; the rapid ascent of competent global competition; the environmental, energy and global challenges requiring unconventional or at least new thinking; recruitment and build-it-and-they’ll-come strategies are zero sum; the need for universities to sustain and excel at their core missions of education and scientific discovery, etc.

Instead let’s suffice to say: economic development needs to become as entrepreneurial and efficient as the startup/high growth companies we recognize are drivers of the economy. A well-resourced VDO represents just that – adapting and adopting tech entrepreneurship to fit the world of tech-based economic development policy and practice.

VDOs are flexible, company-focused, lean, multifaceted, regionally grounded, nonprofit organizations that help high growth, innovation/tech based companies to succeed. Nearly all have direct financial resources to invest in a company (could include small working capital grants, providing due diligence support for angel networks or organizations, convertible debt or as is quite often the case direct earliest stage equity capital). They have a financial orientation or acumen that mirrors the private equity community more closely than a traditional state, federal or university grant program or even SBIR. Most are agnostic to the source of the technology a company or entrepreneur might be commercializing. That doesn’t mean the VDO can’t be sector-focused. VDOs can fit very well in a cluster-based strategy to encourage growth. Instead the agnosticism means the VDO is open to high growth business opportunities from any source – a university, a federal lab, an SBIR award, the private company, students, or technologies developed on the other side of the world.

VDOs are about the business of innovation-based economic development. That pervades the organization from the corporate leadership on the board, the VDO management and staff most often having direct, personal experience as entrepreneurs or in small tech firms themselves, and the institutionalized commitment to regular assessment of progress. Just as their client companies have to focus on their bottom lines, VDOs see regular impact measurement as sacrosanct.

In developing the characteristics of a VDO, SSTI worked with more than 100 organizations around the country that we felt had some or all of the qualities we thought would end up in the definition of a VDO. As we narrowed the list to the current 16 characteristics website visitors will find under “VDO characteristics” in the VDO Basics section, the organizations polled said the most important quality to be considered a VDO was the commitment to regular measuring of impact and performance.

Q: How can economic professionals leverage this tool to enhance their current development efforts and create thriving economic ecosystems?

A: At this point there are only a dozen or two really strong models of VDOs around the country, and several dozen more VDO-ish organizations that need to be supported, and hundreds more that could become VDOs.

Reflecting on the current list of VDO characteristics and the metrics that matter, and even the guiding principles for RIAN, that there is something here for everyone to consider for their own practice. RIAN represents an opportunity for improvement for all of the economic development community.

So far, people can have at least two reactions to what’s here: They can be inquisitive and open to the concepts. Or they can say there’s nothing in this for me because this doesn’t apply to my organization because we’re a conventional recruitment & expansion economic development group or we’re in a rural area or we don’t have a bunch of techies or lab coats running around town.

I am saddened by the second group because they are limiting their options for improving the impact of their economic development efforts. So far, there aren’t a lot of members to the second group in my encounters since we launched the site. I think the VDO profiles and success stories reveal this can happen anywhere – with the right commitment to creating the opportunity for it to happen.

So I encourage people to spend a little time exploring the site objectively and patiently, without considering what presently is going on in your organization. Read through the guiding principles. Go through the VDO Basics on regional assets, VDO characteristics, metrics that matter. Explore some of the specific client success stories, look at the impact data. It takes some time, I know. Sometimes change does.

The next step is to bring the vitals – the metrics and VDO characteristics – into thinking about your own organizations, the others within your region, and your own experiences. If nothing else, we need to adopt more of the rigorous impact measure and performance practice of the VDOs.

And we need to sing client successes more; particularly the ones we think are small. It’s easy to think the headlines should be full of the big company expansions or relocations with hundreds or even thousands of jobs for an area. That’s great news and cause for celebration in the community, like a wedding or graduation in a personal life.

But our personal lives aren’t weddings and graduations every day. And neither is real regional growth. It’s one innovation company creating a few jobs that pay better than average wages and another one doing the same thing. Then another one and so on. Keep doing it and you’ve built some resilience into your regional economy so when the inevitable headlines come about plant closings and job losses, you are already bouncing back because of your investments in regional innovation.

Keeping up with the analogy, there are a lot of steps along the way to getting your kids through school or planning a big wedding. Same for growing innovation based economies. VDOs regularly share their numbers and celebrate client successes, help people to see it’s a process, it’s all intertwined in the region’s growth, and it’s done one venture at a time.

The RIAN project and website try to convey that too. Region by region. VDO by VDO. Company by company. We’ll help companies out-innovate the rest of the world if we, the economic development community, set our minds to being more innovative, too.

Q: What is the State Science and Technology Institute's role in advancing the innovation economy?

A: SSTI has a pretty lucky position at the merger of innovation and economic development. I won’t say unique because that word is so overused, but we’ve managed to maintain a perspective on technology-based economic development policy and practice that strives to be comprehensive, strategic or holistic. The economic development field needs all of the associations that are dedicated to improving the practice of individual aspects of a regional innovation economy. Those associations provide valuable professional development opportunities for individuals within the different approaches to economic development and educate the broader public on the important roles those approaches serve. SSTI adds something slightly different but critical to the mix by looking at how all the pieces fit together into a shared strategy (whether implicitly or explicitly). Then collectively, asking how to make things work better.

Since SSTI was founded in 1996, we’ve served a role as observer, convener, reporter, facilitator, independent think tank, educator, neutral intermediary, and occasionally provocateur for the field – primarily focused on technology-based economic development or TBED. From day one, we’ve approached TBED as a public-private partnership that requires the active participation of government, industry, academia, and private and civic organizations. That holistic approach provides the opportunity to develop and espouse a different perspective than may normally be encountered.

The RIAN project fits well with that organizational personality and the approach to developing the network, the conceptual definition of VDOs, and the community engagement. RIAN encapsulates the community aspects of SSTI’s core missions of understanding practice, advancing best practices and maintaining impartiality toward the common goal of advancing economic growth through investments in science, technology and innovation.